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Finding fuel for growth in consumer goods

Overview

The consumer goods industry has been in a state of slowing growth and therefore on a journey to get lean to be more profitable. Forty-two percent of survey respondents are in the process of designing for growth by optimizing costs and expect completion within a year, and 61 percent anticipate their journey to be completed within the next 6 to 12 months.

Although a majority of consumer goods companies have reduced costs and made operations leaner, it’s time to pivot to growth. Funding investment in profitable growth will keep consumer goods companies competitive in the fast-changing digital age. Digital has already disrupted the consumer goods industry and it will continue to do so. Now, businesses need to restructure their operating model to be more agile, responsive and engaging to seize the opportunities of the future.

prioritize the reinvestment of cost savings in alignment with business strategy.

Consumer Goods investor analysts are expecting companies to continue investing for growth through Capex, R&D and diversification into new markets.

Growth Hurdles

While 78% of consumer goods companies plan to funnel cost savings into growth and have enterprise-wide strategies are in place, several factors are getting in the way of progress.

Top Challenges

Having “too many concurrent growth initiatives” was cited as the #1 challenge by 1/5 of respondents.

Definitely Digital

Consumer Goods companies must use digital to create a holistic view of the consumer across brands, categories, channels, and the entire value chain. Such a view enables companies to push the right offer through the right channel and engage often in a meaningful way to win consumers and build loyalty.

Investing in digital

Consumer goods companies are investing wisely in digital—not just in new capabilities, but also in areas that can drive transformation.

Most common direction for reinvesting cost savings:

58%

Digital technologies

55%

Launching new products and services

49%

Expanding into new product/service lines or consumer segments

More than half “strongly agree” that digital is an enabler of strategic growth.

Ready for the Future

Consumer goods companies need the right talent, operating model and capabilities to fuel success in the digital world—and in the future. These recommendations show the path forward.

About the Research

Accenture conducted quantitative research across 700 executives in 13 industries and nine geographies to analyze the challenges and opportunities associated with creating cost-competitive operating models and reinvesting in growth. In parallel, Accenture interviewed 65 industry analysts across these industries to understand what external stakeholders measure, value and expect from the companies they cover. Results are available in the report: “Increasing Agility to Fuel Growth and Competitiveness,” Accenture, 2016.

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